Household saving is defined as the difference between a household’s disposable income (wages, income of the self-employed and net property income) and its consumption (expenditures on goods and services.)

Emerging Markets : Plus Ça Change

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New president, old habits: Russia's overt display of military strength.

Dmitry Medvedev was sworn in as president of Russia on May 7—and, according to plan, the next day former president Vladimir Putin became prime minister. The new cabinet, announced a few days later, looked quite a bit like the old cabinet, maintaining a fine balance between economic liberals and the hardliners who share Putin’s KGB background. Viktor Zubkov, Putin’s last prime minister, was made a first deputy prime minister, while key faces in the finance, economics and defense arenas remained the same.

Putin will clearly remain the center of power, despite passing on the presidency to his long-time aide Medvedev. Expectations are that the new government will push ahead with the next phase of the so-called Putin plan, which will likely entail a greater focus on investment and advancing reforms to improve the business and investment environment. Cheered by the constitutional passing on of the presidency (even if Putin remains the man in charge) and buoyed by continued strength in oil prices, Russian shares in mid-May flirted with all-time highs.

As if to showcase its resurgent strength—albeit now more economic—Russia, for the first time since the Soviet era, staged a full-scale military parade on Red Square in central Moscow. Putin explained that the show of force was to demonstrate the country’s resurgent defense capability, rather than provoke concern. Meanwhile, tensions with Georgia flared up once again, with Russia increasing troop deployments near the Caucasus republic and Georgia threatening to block Russia’s efforts to join the World Trade Organization.

Evidence continued to mount that the Russian economy has managed to largely escape the reverberations of the past months of global economic turmoil, with fixed investment growing by 20.2% during the first quarter and unemployment declining by 0.2 percentage points in March to 6.4%. Real disposable income during the month rose by 7.8%, while consumption growth clocked in at an impressive 16.5%.